5 per cent ‘have no reserves’

Finance | 24 Sep 2009

A survey of 127 mostly small and medium-sized charities has shown that 5 per cent hold no reserves at all, and nearly a quarter hold less than three months’ worth.

But nearly half of them hold reserves that would last at least six months, according to the survey by CAF Bank.

The same number saw their reserves increase over the last year as saw them drop (42 per cent). If the economy does not start to grow for another year or more, 40 per cent of charities expect to hold less than three months of reserves.

A separate survey of more than 2,000 members of the public, conducted by Acevo, found that 58 per cent believed charities should build up reserves to see them through tough times. Some 16 per cent did not believe they should, and one-fifth had no view.

John Low, chief executive of CAF, said it was reassuring that so many people understood the need to put money aside for reserves, especially as charities have traditionally found it uncomfortable to talk to donors about reserves.

Directory: Association of Chief Executives of Voluntary Organisations (ACEVO) | Charities Aid Foundation
Who's Who: John Low

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